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FROM THE ARCHIVES:

AN INSIDE LOOK AT THE HOLIDAY LIGHTING BUSINESS
(November/December 2007)

By, Anne Richter

No one can deny that America is a nation of holiday-enthusiasts. Christmas carols and retail frenzy have gradually crept up the calendar to the point where the holiday season now occupies a sizeable chunk of the year. Needless to say, this phenomenon has morphed into a significant business enterprise. For many window cleaners, holiday lighting has become a lucrative add-on business. And for some, the demand is so high that holiday lighting has practically become a full-time source of income in and of itself.

How do you know if holiday lighting is a good fit for you, and what’s the best way to get started? Here are some guidelines from a few window cleaners who conquered the holiday season.

BEFORE YOU GET STARTED – SOME THINGS TO CONSIDER

Where the Lights Are

Most people love holiday lights. But from a business perspective, it’s important to recognize the right types of opportunities for holiday lighting services.

Patrick Analore, owner of Festive Lights and Decorations! in Oviedo, Florida, got started in holiday lighting when a customer’s husband hurt his back. But while his introduction to the business may have been somewhat fortuitous, his decision to expand was due in large part to the market in which he worked.

“Neighborhoods with big homes and dual income families with disposable income are the best opportunities,” he says. Nevertheless, Patrick advises setting a minimum price for services to ensure a quality customer base and good return on investment.

Photo courtesy of Coby Powell, Holiday Illumination

“You don’t want people calling you to come hang the four strands of lights they just bought at Wal-Mart,” he explains. According to Patrick, a minimum of $500-$1000 per job is standard.

Fortunately for window cleaners, you may not have to look very far to find your best holiday lighting customers. Jim Harshaw, owner of Albemarle Window Cleaning & Holiday Lighting in Charlottesville, Virginia, got into window cleaning and holiday lighting at the same time. It quickly became apparent that the two businesses were a natural fit for one another.

“It was the exact same clientele,” he says. “You basically double up on customers without any extra effort or expense.”

Commercial Versus Residential

As is often the case, there are pros and cons inherent in each market. Coby Powell, owner of Holiday Illumination, Inc. in Las Vegas, Nevada, has worked with both types of customers. Commercial customers, he says, are “more loyal and have larger budgets.” You can probably expect fewer service calls from commercial customers, although dealing with corporate accounting systems means that you can also expect to wait for payment – sometimes until January or February.

Patrick, who works exclusively with residential customers, admits that there are bigger payouts to be had on the commercial side. But there can also be “more paperwork” and “more footwork” involved in acquiring new business. For the most part, it’s much easier to develop a residential client base. Agrees Coby, “Many times just parking in a certain neighborhood will pick you up a couple of jobs on the same street.”

Residential customers also tend to pay on-the-spot and often with cash. However, these conveniences can come with a few headaches. “Residential clients will call you day and night when the slightest thing goes wrong, and expect you to show up right then,” says Coby.

In general, your existing business model should dictate which market is best for you. For instance, if most of your customers are residential, chances are you’ll be better off leveraging that network to promote holiday lighting services. If you’ve had difficulty building out your window cleaning business on the residential side, don’t expect better luck with lighting – as discussed above, the characteristics of a good residential market tend to be nearly identical.

GETTING STARTED – WHAT YOU NEED TO KNOW

If you’re reading this article in November, it’s not too late to start thinking about holiday lighting – for the 2008 season. Successfully incorporating holiday lighting into your business requires careful planning and preparation. Patrick recommends that you begin planning as early as February if you’re new to the business.

“It’s a business,” he says. “And it has to be treated like a full-scale business.”

On the residential side, word of mouth alone will bring many customers to your door. If you are looking to expand into a neighborhood where you have existing clients, there are several easy ways to get your name out – Patrick suggests asking someone you know if you can put up their lights early on in the season. “Then put up a lighted sign with your display,” he suggests. “But if you have the right neighborhood it really does sell itself – people will actually approach you and ask for a card while you’re installing lights.”

Initially, you can also execute some inexpensive marketing campaigns to get into new neighborhoods and build up a good residential client base. Something as simple as putting flyers in mailboxes in October – and then again in November – is a good way to start.

Print advertisements can also be an effective marketing tactic for both residential and commercial business. Jim Harshaw promoted his holiday lighting services in a local weekly publication and saw significant success with only one ad placement. The ad was formatted as a news article on holiday lighting, which Jim believes was helpful in capturing reader interest and drawing attention to his business.

To promote Holiday Illumination, Coby advertises in several high-end magazines and on full-color vinyl trailers. For commercial business, he says that the company’s active membership in local BOMA and IREM chapters has been “very rewarding” in terms of establishing contacts.

And don’t forget that cross-selling your services works both ways: holiday lighting customers (both commercial and residential) serve as an excellent source of new window cleaning business.

Equipment

Depending on the market you’re considering for holiday lighting services, you may have all the equipment you need. For the most part, make sure you have plenty of ladders (from 20’ to 40’ as well as A-frame). Window cleaners will also need to invest in some basic electrical tools: Jim recommends starting out with an outlet tester, wire cutters, and wire strippers.

Miscellaneous equipment (cords, plugs, timers, etc.) should be purchased at least a week before Thanksgiving. Any later than that and supplies will start running low – especially if you’re buying in bulk.

The Lights

With holiday lighting, you can either sell or lease the lights to your customers. Coby advises against installing a customer’s own lights as they tend to be “in very poor condition and unreliable.”

When purchasing your lights (whether for sale or for lease), you must consider the overall quality of the product. Commercial-grade lights are more expensive, but look better when installed and have a longer lifespan. Festive Lights and Decorations! obtains commercial-grade lights from a local distributor, but if you can’t find any in your area, you may need to order them online.

For residential business, experts agree that selling the lights to your customers is the best option because you can boost your profit margin by buying lights in bulk and selling them at a mark-up. If you’re using commercial-grade lights, be sure to sell your customer on the value of their investment.

“They’ll be paying more the first year when they buy the lights, but after that it’s basically just cost of labor,” says Jim. “And more often than not, a customer will come back and decide to buy even more lights the next year – so it becomes very easy to up-sell over time.”

Patrick, who sells commercial-grade lights to his residential clients, explains that it’s important to start a customer off with a simple package the first year. “You want to sell them on the concept first,” he says. Patrick’s preferred package for a new client consists of basic roofline lighting and a giant wreath. Greenery, he claims, is a particularly attractive offering because it has the greatest mark-up and is usually quick and easy to install.

Coby agrees that it’s best to stick with simple packages for residential business. “Don’t install ‘Griswold jobs’,” he warns. “They’re not profitable and they’re a huge headache.”

Another thing you will need to decide is how to handle storage of holiday lights. Festive Lights and Decorations! dismantles and packages all decorations for its customers, but does not offer storage throughout the year. “It can be a hassle,” says Patrick, “especially if you have a lot of customers and you need to keep track of what belongs to whom.”

But if you’re willing to deal with the added hassle, storage services can provide a good source of revenue. Holiday Illuminations has a facility to store client decorations. “It’s usually going to be your biggest expense besides labor and lights,” says Coby, “but it can easily be paid for and more if you bill your clients for the service.”

Learning the Ropes

Even if you’ve perfected your personal holiday lighting display, there’s probably still a lot you can gain from professional training materials. Patrick recommends the training DVDs available through a company called Creative Decorating (www.creativedecoratinginc.com). The complete set of training videos (covering everything from installation to electrical and design) runs around $500, but Patrick insists that it’s well worth the price. “Once you learn the system you’ll become more efficient and therefore more profitable,” he says. “The videos are also the best and easiest way to instruct your employees on style and technique.”

In particular, it’s important to be familiar with the electrical work required for complex holiday lighting jobs. “That’s something window cleaners may not know as much about,” says Jim. “So do your homework and make sure you’re comfortable with it before you start bidding jobs.”

Photo courtesy of Coby Powell, Holiday Illumination

Pricing Strategy

There are several factors to consider when bidding a job for holiday lighting. Among these, difficulty, complexity, and location of job are all important. For buildings, most companies price by foot. Trees are more labor-intensive and take longer to dismantle than buildings, so pricing by strand is typical.

Having your technique down to a science will help you make more accurate estimates of the time and cost associated with different types of jobs. Not only is this an essential part of the planning process (because you’ll need to determine how much help you need and how many jobs you can commit to), but it also gives you the ability to set realistic expectations for your customers. Commercial customers, in particular, tend to have fixed budgets, so it’s important that you be able to maximize your profitability within their spending guidelines.

Jim developed an efficient system for Albemarle Window Cleaning & Holiday Lighting that he uses toevaluate the expense and resources associated with a given client. “It’s something I started doing after my first year in the business and it’s been incredibly effective since then,” he says. He created detailed estimate forms to keep track of every aspect of a job: amount of lights used, size of house, trees and bushes, special customer requests, etc. This information helps him qualify the different factors that make up overall cost and profitability of a client (for instance, a comparison of cost of materials versus cost of labor for each job). This type of system can also come in handy if a customer requests a detailed breakdown of expenses.

YOUR FIRST SEASON – WHAT YOU CAN EXPECT

Of course, everyone’s experience will differ depending on the type of customers they attract, the amount of preparation they have, and the resources at their disposal; but in general, there are a few things you should expect as a newcomer to the holiday lighting business.

It’s Intense

“Prepare to essentially give up your holiday season,” cautions Patrick, who typically works 15-hour days, seven days a week, for six weeks straight. “Kiss your wife goodbye on November 1st and tell her you’ll see her sometime mid-December!”

Coby agrees that many people go into the business unaware of how big a commitment it is: “Most people don’t realize that the holiday season is actually five full months of work,” he says. “It can be difficult to juggle holiday lighting and window cleaning, especially if you live in a climate where the weather is still nice in October and November.”

In addition to the time you’ll spend actually setting up and taking down the displays, you should also consider the amount of time you’ll need to devote to ongoing lighting maintenance – particularly with residential customers.

You’ll Need to Plan in Advance

“There’s a massive inventory associated with holiday lighting compared to window cleaning,” says Jim. “And so as a result, there’s a lot more planning and paperwork.”

Dealing with a large and often complex inventory of supplies, Jim believes, is one of the most complicated parts of the holiday lighting business. It requires an understanding of what tools, lights, and equipment will be needed for each job that comes your way – and you’ll need to keep track of this information from year to year as your customer base grows and changes. On top of that, prepare to spend a lot of time crunching numbers and juggling vendors as you compare the prices of different distributors and negotiate discounts for your supplies.

“You have to plan everything,” stresses Jim. “In that respect, it’s a lot more work than window cleaning.”

You’ll Have Your Pick of Customers…So Pick Wisely

“I’m continually surprised at how little serious competition there is for holiday lighting services,” says Patrick. “You’ll never lack for work, I guarantee you that.”

Coby Powell agrees: “I think many window cleaners would be surprised at how lucrative this really is,” he says. Since it first started, Holiday Illumination has grown approximately 40% each year, generating an astounding $1 million in business during the 2006 holiday season alone.

But don’t let the abundance of opportunity overwhelm you: be strategic in the selection of new customers and business opportunities. Otherwise, you run the risk of spreading yourself too thin and taking on more than you can handle (especially during your first year).

For instance, try to build your customer base within a set geographic area (multiple houses within a few local developments) – this will reduce the amount of time and money wasted on transportation. You’ll be more productive and more profitable – not to mention less stressed. Even if you can’t group all your clients according to location, map out a plan (for installation, service, and dismantling) to ensure that you make the best use of your time.

Having the good “problem” of too many customers also means you can be picky about the type of jobs you select. “If you can, turn down the hard jobs (like steep roofs) that will kill your productivity,” says Patrick.

There’s a Learning Curve

Expect to make mistakes your first year, the experts say. Like any major undertaking, you should assume that it will take some time to refine your strategy and figure out what works best for your business.

Fortunately, there are resources available to you should you need help along the way. Holiday Illumination has been in the business for nearly ten years, and now offers consulting services to window cleaners seeking guidance on how to get started with holiday lighting.

Jim suggests seeking out (non-competing) mentors who can provide you with ongoing advice and input. “I was happy to find a number of people in the industry who were willing to answer all my questions,” he says.

A FINAL WORD

Holiday lighting offers almost endless opportunity for window cleaners who are up to the challenge. It’s an endeavor that is best approached only after careful planning and consideration; and with a full understanding of the work and commitment required.

But in the end, you may be surprised at the magnitude of your ultimate reward – and not just in the financial sense.

“People are genuinely happy when they see the final product,” says Jim. “And there’s nothing like driving through a neighborhood at night and getting to show your kids all the lights that Daddy put up…